Japan’s OSE delays futures launch ahead of merger

Japan’s Osaka Securities Exchange (OSE) has postponed the
launch of OSE Dow Jones Industrial Average Futures, originally due to launch 27 February.

A new launch date has not yet been confirmed but the derivatives-focused OSE has
said it will still be launching its new Nikkei 225 Volatility Index
Futures as planned on 27 February.

The OSE owns the Nikkei indices, which track the performance
of Japan’s top companies in stocks and futures. A volatility index typically
measures the market’s expectation of movements in stock, options or derivatives
markets over the next 30-day period. The Dow Jones Industrial Average tracks the performance of the top 30 US companies.

Tentatively placed for January 2013, the Osaka exchange is currently working towards a merger with the more
equities-focused Tokyo Securities Exchange (TSE). The merger of the two bourses is intended to form the core of
a national, multi-asset class exchange that will attract greater international
participation and help fend off the advances of proprietary trading systems, which have been seeking to take market share from the primary
bourses.

Earlier
this month, Japan’s Financial Services Agency agreed a reform document with the
Agriculture Ministry and Ministry of Economy, Trade and Industry that would
allow the FSA to oversee a combined stocks, financial futures and commodities
exchange in the country, with the expectation that a unified exchange will
launch next year.

However, on
14 January 2012 the Tokyo Commodity Exchange (TOCOM) revealed it would
delay its own merger with the combined Tokyo and Osaka exchange, until the
merged entity had decided what transaction system will be used after integration. TOCOM has stated it will reconsider the merger once a
decision on the transaction system at the combined TSE-OSE has been made.